Sydney’s Prestige House Market October 2018

Once upon time I would have rushed out to the local hardware store and bought myself a helmet in anticipation of the sky falling in. Eventually you get tired of your desk being covered in helmets. You could have been forgiven for thinking the sky was in fact going to fall in after the recent 60 Minutes report “Bricks and Slaughter”. If you haven’t seen the story, don’t; you will only rush out to Bunnings to buy a helmet.

The story suggested houses prices could fall by 40%. My first boss once advised me at the start of my career, in the late 80’s, that “the only thing that’s new, is what’s been forgotten”. I recall right after the Global Financial Crisis (GFC) in late 2008 a University Professor in Sydney predicting the same, that house prices would fall by 40%. They fell by about 5.5%.

Despite the suggestions on 60 Minutes of 40% drops in value to possibly occur, the top end of the property market in Sydney is rolling on regardless.

Australia’s luxury market expert has done it again. Ken Jacobs of Christies International has just sold Australia’s most expensive house sale ever for close to $100M. The sale at 560 New South Head Road, Point Piper (pictured above), also known as Fairwater surpasses the current record price in Australia of $71M by a large margin. Last year, Ken also sold the adjoining property at 550-550a New South Head Road, Point Piper, known as Elaine, which took the top spot from James Packer $70M sale in Vaucluse in 2015.

Fairwater and Elaine were both owned by the media family Fairfax since 1901 and 1891 respectively.

Last years sale of Elaine for $71M reflected a rate of $10,294/per m2 of its site area.

Fairwater at say $100M would reflect $9,880/per m2 of its site area. Interestingly the Valuer Generals Land Value assessment for the current year is $83.6M which suggests the rumoured sale price is definitely within reason.

The sale by Ken is on the back of another luxury sale at Palm Beach where $18M was negotiated in July on a brand-new residence on Ocean Road. This is the highest sale of a single residence on the entire Northern Beaches since April 2012. It is also the second highest sale ever on the Northern Beaches, just behind the $22M sale only a few doors away, also on Ocean Road. Whilst there is a $24M recorded sale in December 2015 at Palm Beach, it was an inter-company sale amongst the Packer family.

Records prices continue around Sydney with $16M recently paid in Bower Street Manly for a leasehold property, making it the highest sale in Manly for a single residence and the 3rd highest house sale ever on the Northern Beaches.

Not to be outdone, Kangaroo Point in the Sutherland Shire also record its highest ever price for a single residence at 88-90 Kangaroo Point Road (pictured below). The undisclosed sale price, just under $11M, is more than the previous suburb record of $10.85M and is yet to settle.

Mosman also recorded a suburb and Lower North shore record price of $25M in July for a property in Hopetoun Avenue. This record-breaking sale took the top spot from another nearby property at Burran Avenue that sold in February this year for over $23M. The Burran Avenue record price lasted a mere 5 months.

A house in Bayview Hill Road at Rose Bay sold for an undisclosed amount, rumoured to be $43M - $45M. Records in Corelogic RP Data reveal a sale price of $1 on the 4th of April. Somehow, it’s doubtful the Office of State Revenue charged Stamp Duty on $1. This sale smashes its own record price for the suburb that was set in 2016 at $33,000,000.

Amidst the record house sales, there was a sobering auction sale at Victoria Road Bellevue Hill on the 27th of September. The house known at Bonnington sold for $20.4M. The property was purchased last year in June for $20.5M. It is understood the owner undertook some cosmetic works since the 2017 purchase.

So, whilst the broader Sydney market is undergoing a price correction after a protracted property boom, the luxury end of the market continues to attract strong demand with genuine trophy homes recalibrating prices in their suburb and region.

Only time will tell if the top end of the market will soften, for now, the good times roll on.